HYPERA S.A. Hypera Pharma reports growth of 13.7% in Net Revenue and 16.2% in EBITDA from
Continuing Operations in 1Q23
São Paulo, April 27, 2023 - Hypera S.A. ("Hypera Pharma" or "Company"; B3: HYPE3; Bloomberg: HYPE3 BZ; ISIN:
BRHYPEACNOR0; Reuters: HYPE3.SA; ADR: HYPMY) announces its financial results for the 1st quarter of 2023. Financial data disclosed here are taken from the consolidated financial statements of Hypera S.A., prepared in accordance with the Brazilian Accounting Pronouncement Committee (CPC) and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
1Q23 Highlights
- Net Revenue of R$1,698.2 million, up 13.7% versus 1Q22
- Non-RetailNet Revenue growth of 34.8% in 1Q23, when compared to 1Q22
- EBITDA from Continuing Operations (excl. Others) of R$580.3 million, or 16.1% higher 1Q22
- Interest on Equity approval of R$194.8 million in 1Q23
Table 1
(R$ million) | 1Q22 | % NR | 1Q23 | % NR | Δ % |
Gross Revenue, net of Returns and Unconditional Discounts | 1,709.4 | 114.4% | 1,940.2 | 114.3% | 13.5% |
Net Revenue | 1,493.6 | 100.0% | 1,698.2 | 100.0% | 13.7% |
Gross Profit | 939.2 | 62.9% | 1,086.1 | 64.0% | 15.6% |
SG&A (excl. Marketing and R&D) | (206.7) | -13.8% | (249.1) | -14.7% | 20.5% |
Marketing | (233.1) | -15.6% | (268.3) | -15.8% | 15.1% |
EBITDA from Continuing Operations (excl. Others) | 500.0 | 33.5% | 580.3 | 34.2% | 16.1% |
Net Income from Continuing Operations | 349.5 | 23.4% | 339.4 | 20.0% | -2.9% |
Cash Flow from Operations | 311.8 | 20.9% | 301.5 | 17.8% | -3.3% |
EARNINGS CONFERENCE CALL - PORTUGUESE: 04/28/2023, 11am (Brasília) / 10am (New York)
Webcast:click here/ Phone: +55 (11) 4700-9668ID: 860 8678 8664 Passcode: 321717
Replay: ri.hypera.com.br
EARNINGS CONFERENCE CALL - ENGLISH: (Simultaneous translation): 04/28/2023, 11am (Brasília) / 10am (New York)
Webcast:click here/ Phone: +1 (720) 707-2699ID: 860 8678 8664 Passcode: 321717
Replay: ir.hypera.com
IR contacts
+55 (11) 3627-4206
1+55 (11) 3627-4097 ri@hypera.com.br
Operating Scenario
Hypera Pharma's Net Revenue grew 13.7% in 1Q23, when compared to the same period of 2022, and reached R$1,698.2 million. This growth is mainly a result of: (i) the organic growth of 9.9% in the pharmaceutical retail market, mainly driven by the recent sell-outperformance; (ii) the additional contribution to Net Revenue in the quarter of R$43.9 million from the portfolio of brands acquired from Sanofi in 2022; and (iii) the Non-RetailMarket Net Revenue growth of 34.8%.
The organic sell-out growth in 1Q23 was 5.9%¹, and was negatively affected by the performance recorded in January and February, a consequence of the strong year-on-year growth recorded in this same period in 2022, when the Company grew organically 28.0% over the first two months of 2021, or 6.9 percentage points above the market, a result of the significant growth in sales of anti-flu medicines due to the increase in cases of influenza (H3N2) observed in Brazil in early 2022. In March, the organic sell-outgrowth was 19.1%, a similar level recorded by the Company in 2022.
In 1Q23, the market growth was 10.7%. It is important to mention that the organic sell-out compound annual growth rate in the last 2 years (CAGR 1Q23 vs. 1Q21) was 14.1% in the quarter, or 0.7 percentage point higher than the market growth, mainly reflecting the acceleration in the pace of launches in the last years, the increase in production capacity and the investments in the Company's leading retail pharmaceutical brands.
Organic sell-out growth in this quarter was benefited mainly by: (i) the Power Brands³ Buscopan, Torsilax, Dramin, Epocler and Engov; (ii) the line extensions of the Vitasay and Vitaminas Neo Química brands; (iii) the Skincare growth, boosted by the line extensions of the Mantecorp Skincare brand; and (iv) the performance of the recent launches Ammy, Ondif, Curc and Picbam (Apixabana).
Non-Retail contributed with R$70.9 million to Net Revenue in 1Q23, reaching a growth of 34.8% over 1Q22, with an important EBITDA margin expansion, resulting from the initiatives implemented by the new structure created in 2021 to increase Hypera Pharma's growth and profitability in this segment.
The Net Revenue performance contributed to the EBITDA from Continuing Operations growth, when excluding the contribution of Other Operating Revenues, of R$580.3 million, or 16.1% higher than in 1Q22, with a margin of 34.2%, or 0.7 percentage point higher than the same period of the previous year.
The EBITDA Margin expansion in the quarter was mainly due to the 1.1 percentage point expansion in Gross Margin. It is worth mentioning that the Medicines Market Regulation Chamber (Câmara de Regulação do Mercado de Medicamentos - CMED) approved the price adjustment of medicines by up to 5.6%, with effect from 2Q23, which will help Hypera Pharma to offset part of the inflationary pressures registered in the last 12 months on its operating costs and expenses.
The Operating Cash Flow was R$301.5 million, and was negatively impacted by the higher working capital investments, mainly due to the increase in inventories. This increase is a consequence of: (i) the strategy adopted by Hypera Pharma since the beginning of the Covid-19 pandemic to increase the internal inventories of raw materials and finished products to ensure the supply of its main products in periods of lower availability of raw materials for the production of medicines, which contributed to the Company's expansion of its market share in 2022; and (ii) the increase in the safety inventories of finished products due to the collective vacation in the manufacturing complex of Anápolis in April 2023.
With the normalization of the availability of raw materials for the production of medicines, the Company started in the end of 2022 a process to reduce the purchase of raw materials that, combined with the expected growth in sellout and the expected launches of new products, should reduce the level of inventories in the next 12 months.
Also this quarter, the Board of Directors approved the payment of Interest on Equity of R$194.8 million (R$0.31/share).
The performance presented in the first three months of the year, the strength and resilience of the Company's portfolio of leading brands and the contribution of recent launches and acquisitions reinforce Hypera Pharma's confidence in achieving the financial targets and projections set for 2023.
Note: (1) Sell-out PPP (Pharmacy Purchase Price), as informed by IQVIA, considers the average purchase price by pharmacies and chains. Does not consider the sellout of the brands acquired from Sanofi in 2022; (2) As informed by IQVIA, excludes the infant formula segment; (3) Power Brands are brands with +R$100 million sell-out.
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Innovation & Launches | |
Graph 1 | Total R&D investments, including the amount capitalized as |
intangible assets, totaled R$158.1 million in 1Q23, or 28.1% higher | |
than 1Q22, evidencing the Company's commitment to the constant | |
innovation of its portfolio of products. | |
The Freshness Index, corresponding to the percentage of Net | |
Revenue from products launched in the last five years, was 24% in the | |
1Q23, compared to 21% in 1Q22. | |
It should be noted that the Freshness Index calculation includes the | |
contribution of the portfolio of medicines acquired from Takeda, Sanofi | |
and the Buscopan family. | |
In 1Q23, the Company launched several new products in all its business | |
units. | |
In Prescription Products, the main highlights were Ecoxe, an etoricoxib- | |
based product for pain relief and acute and chronic treatment of the | |
signs and symptoms of osteoarthritis and rheumatoid arthritis, and | |
Lisador Cólica. In addition, Hypera Pharma launched its 3rd full | |
spectrum cannabidiol-based product. |
In Consumer Health, the main highlights were the Benetosse syrup, for cough relief, and Tamarine Fibras Max, line extension of the Tamarine brand. In Skincare, the main highlights were the line extensions of the Episol, Urby Men, Epidrat and Glycare brands.
In Similars and Generics, the highlights were the launches of Vitamina D3 Colecalciferol, Tramadol Hydrochloride with Paracetamol and Olanzapine. In the Non-Retail Market, the highlight was the launching of the bactericide Meropenem.
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Note: (1) Considers the R&D expenses and the amount capitalized as intangible assets. Excludes the effect of the Lei do Bem and the R&D amortization
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Earnings Discussion
Income Statement
Table 2
(R$ million) | 1Q22 | % NR | 1Q23 | % NR | Δ % |
Net Revenue | 1,493.6 | 100.0% | 1,698.2 | 100.0% | 13.7% |
Gross Profit | 939.2 | 62.9% | 1,086.1 | 64.0% | 15.6% |
Marketing Expenses | (233.1) | -15.6% | (268.3) | -15.8% | 15.1% |
Selling Expenses | (183.7) | -12.3% | (209.4) | -12.3% | 14.0% |
General and Administrative Expenses | (65.5) | -4.4% | (80.8) | -4.8% | 23.3% |
Other Operating Revenues (Expenses) | 5.6 | 0.4% | 7.2 | 0.4% | 28.6% |
Equity in Subsidiaries | 5.5 | 0.4% | 0.9 | 0.1% | -84.0% |
EBIT from Continuing Operations | 468.1 | 31.3% | 535.8 | 31.6% | 14.5% |
Net Financial Expenses | (173.6) | -11.6% | (265.8) | -15.7% | 53.1% |
Income Tax and CSLL | 55.1 | 3.7% | 69.4 | 4.1% | 26.0% |
Net Income (Loss) from Continuing Operations | 349.5 | 23.4% | 339.4 | 20.0% | -2.9% |
Net Income from Discontinued Operations | (2.6) | -0.2% | (0.2) | 0.0% | -93.9% |
Net Income (Loss) | 346.9 | 23.2% | 339.3 | 20.0% | -2.2% |
EBITDA from Continuing Operations | 505.7 | 33.9% | 587.5 | 34.6% | 16.2% |
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Net Revenue
Graph 2
Gross Revenue, net of Returns and
Unconditional Discounts (R$ mm)
Δ 1Q23 vs 1Q22
1,709.4
13.5%
1,940.2
1Q22 | 1Q23 |
Graph 3
Net Revenue (R$ mm)
Δ 1Q23 vs 1Q22 13.7%
1,698.2
1,493.6
1Q221Q23
Table 3
(R$ million) Gross Revenue, net of Returns and Unconditional Discounts Promotional Discounts Taxes Net Revenue
1Q22 | 1Q23 | Δ % |
1,709.4 | 1,940.2 | 13.5% |
(94.0) | (102.5) | 9.1% |
(121.9) | (139.5) | 14.5% |
1,493.6 | 1,698.2 | 13.7% |
The growth in Net Revenue was 13.7% in 1Q23, when compared to the same period of the previous year, and reached R$1,698.2 million. This growth is mainly a result of: (i) the organic growth of 9.9% in Pharmaceutical Retail Net Revenue, mainly driven by the recent sell-outperformance; (ii) the additional contribution to Net Revenue of R$43.9 million from the brands acquired from Sanofi in 2022; and (iii) the Non-RetailMarket Net Revenue growth of 34.8%, which increased from R$52.6 million in 1Q22 to R$70.9 million in 1Q23.
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Hypera SA published this content on 27 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2023 23:15:30 UTC.
